Interview with Jordan's King Abdullah II; Interview with Dmitry Medvedev

Aired January 27, 2013 - 10:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FAREED ZAKARIA, CNN HOST: This is GPS, the Global Public Square. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to from Davos, Switzerland.

This week at the World Economic Forum, I've interviewed one king, seven prime ministers and one head of government. You'll see them in coming weeks. This week, we have one king and one prime minister.

We'll start with the King of Jordan Abdullah II. His nation sits aside a region in turmoil between Syria, Egypt, Israel, Iraq and Saudi Arabia.

Despite some protests, Jordan hasn't had its own Arab Spring. Everyone was watching the parliamentary elections this week. Will they satisfy protesters or inflame them? We'll get the king's reaction.

Then, the Prime Minister of Russia Dmitry Medvedev. Relations between the United States and Russia are at a new low. Some call it a new Cold War. Who's to blame and will Russia help in Syria? We'll discuss it all.

Also, the Algerian hostage crisis that left dozens dead, is this a sign of a grave new terror threat? I'll tell you my view.

But, first, here's my take. Every year at Davos, people like me try to get a sense of the mood of the place, take the temperature of people in this frosty mountain resort.

Obviously, I will give you a highly impressionistic and personal picture, but it's one I find useful since Davos does bring together leaders in government, business, media, even the NGO community, from all corners of the world. It is genuinely global in a way that few conferences are.

So what is the mood? Well, there is a sense of calm, a relief that many storms that seemed like they might be overwhelming, like the euro crisis, have been weathered. People from America are optimistic, those from emerging markets more so.

But, everywhere, there's a sense of caution. In PWC's annual global CEO survey, released this week, 52 percent saw no change from the current tepid economic environment, 28 percent saw decline and 18 percent said things will get better. It is still an improvement from last year when 48 percent predicted a decline. The last few years of recovery followed by slowdowns, of political crisis, of new terror attacks from North Africa have made people wary of excessive optimism.

Things are stable, crises have been contained, there's some growth on the horizon, but no one's ready to declare that we've turned any corners. There are no bulls in Davos this year, no countries taking center stage.

One symbol of the mood, the big splashy parties that companies like Google used to throw have been quietly discontinued not that Google couldn't afford it; by the way, they just had their first year with $50 billion in revenues.

Underlying this caution, I believe, is a sense that growth that people had gotten used to, economic growth of the past, that countries and companies had hoped for the in the future just doesn't seem likely.

The IMF released a new report this week with growth numbers that are low, lower than they had projected only a few months ago. The world is coming to grips with the fact that the global financial crisis might have ushered in not a few years, but a decade of slow growth and we're not quite halfway through it.

Let's get started.

The next big story in the ongoing changes in the Arab world is the pivotal parliamentary election that took place in Jordan this week. It was the first time ever Jordan has allowed in international observers to monitor its polls.

Jordan's King Abdullah II has said his nation it transitioning to democratic government. But a coalition of opposition groups, including the largest, the Muslim Brotherhood, boycotted the elections saying Jordan's electoral laws favored the monarchy.

That opposition is far from Abdullah's only problem; he has Syria to the north, Iraq to the east and Israel and the West Bank to his west. I sat down with King Abdullah at Davos on Friday.

(BEGIN VIDEO CLIP)

FAREED ZAKARIA, CNN HOST: Your majesty, when you look at the Arab Spring, is it fair to draw the inference at this point in the game that repression has not worked, but bribery has?

By which I mean to say the states that attempted repression are either -- the regime's either gone or teetering like Syria. But those that have large oil wealth, were able to provide patronage of various kinds, particularly in the Gulf, have all survived.

KING OF JORDAN, ABDULLAH II BIN AL-HUSSEIN: Well, I think you have to take a step back to look at history of how the Middle East was divided up. And this is one the problems we face in political reforms in Jordan.

We're still living in the shadows of the Cold War and, during the Cold War, it was more sort of, let's say, the monarchies that were allied to the West and the republics that were allied to the Soviet Union.

And so maybe you've seen the reaction more in the republics than you've had in sort of the countries that are either emirates or monarchies.

But this is what makes maybe the transition to political reform even more difficult. For example in my country, 90 percent of the people are still adverse of being aligned to political parties.

And so, although we've had this wonderful parliament outcome of the 56 percent plus, way beyond I think anybody's expectations, the challenge now -- and I see in Jordan specifically, the hard work for us is actually creating that political party culture where people -- the word is (inaudible) in Arabic and for Jordanians to be part of a (inaudible) is still instinctively something wrong.

So the challenge that we have over the next four years is actually the hard work. I think the easiest part of Arab Spring, over the past year-and-a-half, is behind us.

ZAKARIA: When you look at these elections that were just held, you're absolutely right, your 56 percent turnout, for the first time you let international monitors in ...

KING ABDULLAH II: Second time.

ZAKARIA: Second time, but this was fairly extensive and, yet, the Muslim Brotherhood has said they will boycott it. They are intent on street protests. How serious a problem is that?

KING ABDULLAH II: In actual fact, if you're living in Jordan today, they will tell you that it's not a serious problem whatsoever. I think the weakest standing of any group of Muslim Brotherhood in any countries in the Middle East is actually Jordan.

At the beginning, the doubters out there and the opposition didn't think that anybody would register to vote. We had an unprecedented registration, 70 percent, which is much higher than any country in the Middle East.

So the challenge is how do I reach out the oppositions that boycotted, that actually ended up being very smaller numbers, but we want them to be part of this process because I think anybody who's left out in the cold it just doesn't bode well for any of us.

So the next change is how do we -- or challenge is how do they come in over the next four years and reinvent themselves to be quite honest.

ZAKARIA: You could live with a Muslim Brotherhood prime minister? KING ABDULLAH II: That would -- I don't think that would happen by the right of the people. I mean, their numbers, I think, are at a historically all-time low in Jordan.

But I believe that they're still part of the mechanism and how do we reintroduce them into the reform aspects of the future.

ZAKARIA: What would you like to see happen in Syria? You are facing an extraordinary crisis and I think people need to remember you have now 300,000 refugees from Syria.

You've just gone through a decade in which you took in hundreds of thousands of Iraqi refugees.

KING ABDULLAH II: Yes.

ZAKARIA: The Iraqis have just started going back and you now have this new influx. Do you think that the fall of Assad will, in some way, end this crisis or will that launch the beginning of a larger Syrian civil war?

KIND ABDULLAH II: Well, the challenge that we have is the longer this conflict goes on, the more the country will implode.

And so, for the first time, again, there's talk of is there going to be a fragmentation of Syria, the breakup into different smaller state, which I think would be catastrophic and something we would be reeling from for decades to come.

But the longer it goes on, the nastier it gets, the more complicated it gets. But, at the same time, anybody who's saying that Bashar's regime has got weeks to live really doesn't know the reality on the ground.

They still have capability so I give them a strong showing at least for the first half of 2013 ...

ZAKARIA: Why is it that the army has not gone to Assad and said you have to leave? In other words, there's been relatively little defection at that highest level. Help us understand what the dynamic is that keeps the regime together.

KING ABDULLAH II: Right. Well, the regime was based on Alawite leadership that gives this a lot of its strength. And, again, part of the problem is with some of the minorities, especially if you look at the Christians and the Druze.

Part of the issue that we've been tackling with over the past several -- the past year-and-a-half is seeing this influx of radical fighters coming into the country.

So if you were Druze or you were a Christian who are sitting on the side of the fence, and even certain Alawites are not happy with the way Bashar is dictating the future of his country, but the other alternative, radical Islamic groups coming into Jordan or Syria is more finding. So I think that's what kept them on the sidelines and therefore given more support to the regime because, you know, option two is worse. And so one would ...

ZAKARIA: How much do you ...

KING ABDULLAH II: Option three.

ZAKARIA: How much Jihadi penetration into Syria do you sense?

KING ABDULLAH II: Well, al-Qaeda is established in Syria. They've been there for about a year. They are getting certain supplies of material, weapons and financing, unfortunately, from certain sector. So they're a force to contend with.

And even if we get the best government into Damascus tomorrow, we have at least two or three years of securing our borders from them coming across and to clean them up.

So, you know, Jordan is today, and has been committed since three weeks into the Afghan campaign, we've been there for many, many years, but, today, when we look at Jordanian troops deploying to Afghanistan we've got to really thing because the new Taliban that we're going to have deal with is actually going to be in Syria.

(END VIDEO CLIP)

ZAKARIA: We will be right back from Davos, much more with Jordan's King Abdullah and, later in the show, Russia's Prime Minister Dmitry Medvedev.

(COMMERCIAL BREAK)

ZAKARIA: And we are back in snow-covered Davos. Here now more of my conversation with King Abdullah II of Jordan right after Jordan's parliamentary elections.

(BEGIN VIDEO CLIP)

ZAKARIA: There's another election that took place this week, the Israeli election. When you look at what happened, do you believe that Prime Minister Netanyahu may be encouraged to take more positive steps to try and achieve a two-state solution?

KING ABDULLAH II: Well, I could say I'm probably happier with the turnout of my elections that he is with is, but whatever happens there's an understanding with I think the prime minister because, obviously, we've been in contact with the Israelis and Palestinians.

Last year, 2012, was a year where we tried to keep the atmosphere positive between the Israelis and Palestinians because we knew that America was locked into internal issues with reelection -- or the elections that were going in that country.

President Obama won and, as a second term president, there's always a tremendous advantage of pushing a peace process forward. This phase leading up until the inauguration, Israeli elections, has been what we call the hallmark state.

Jordan with some Arab countries and with three leaders in Europe, the British, the French and the Germans, are all marching towards Washington February and March to say, "Mr. President, it's really time to engage on the Israeli-Palestinian process."

Prime Minister Netanyahu understand that and whatever he does to form his coalition, he's got to keep in mind that the international community, strongly led by the Europeans and, hopefully, with the United States, is going to be knocking on his door and that of the Palestinians to move the process forward.

ZAKARIA: Do you worry that in this election you did also have the rise of new voices in Israel that openly talk about the permanent annexation of the West Bank and Gaza, that talk about the fact that there is no Palestinian State and that Jordan is the Palestinian State?

KING ABDULLAH II: In actual fact, I think, since Arab Spring -- I mean at the beginning of Arab Spring, you had many Israelis saying this is the best thing that's happened to us and all of us couldn't believe or fathom that line of reasoning.

And I would say that most Israelis now look at the Arab Spring with tremendous concern. So the last thing that I would think that the majority of sensible Israelis would want Jordan to be destabilized as an alternative.

So the challenge today is can they create the two-state solution and, quite honestly, I don't think -- if we're not too late, the two- state solution will only survive as long as the end of President Obama's term.

Beyond that, if we don't fix it in the next four years, I don't believe it will ever happen.

ZAKARIA: A final question, I mentioned, you know, repression didn't work, bribery seems to have worked. You haven't repressed, you don't have the money to bribe.

Do you feel like you've managed this kind of balancing act in Jordan and that you worry that all these pressures from Syria, the Israeli issue, could destabilize it all?

KING ABDULLAH II: Well, it goes, I think, without saying that the past year-and-a-half with the very difficult challenges to our economy, to our gas being cut off, or Egypt that got us into the financial difficulties that we're facing today, instabilities in Syria have definitely added to the challenge.

But Jordan has always, I think, looked at whatever policies they have not to use other things that are happening in the area as an excuse. I think the difference between Jordan is -- and many other countries is we took a different approach.

And we push for evolution not revolution and the only way you can do that is through the rule of law. So a national committee was put together and they changed a third of the constitution, created an independent commission for elections, a new constitutional court, many other laws.

So we took the systematic approach mainly because of my experiences in being educated in the West looking how Western systems did it. It was really the rule of law and I sometimes am surprised by Western think tanks and certain of the European ambassadors in our country where they say this is going to be very difficult.

So I say, you think?

(LAUGHTER)

KING ABDULLAH II: I mean, this has been a major challenge and you can't have this by waving a magic wand. It's going to take hard work to create doctrine and platforms so that people start to, for the next elections, vote for candidates because they're on left or right of these political issues.

So that political party culture, that is the major challenge. And where we're starting from low down in Jordan, I think we're still steps ahead of many, many countries in the Middle East.

So I -- you know it's going to be tough for all of us, but that's the only way I think we can do it.

ZAKARIA: Your Majesty, thank you very much. This was a fascinating conversation.

(END VIDEO CLIP)

ZAKARIA: That was Jordan's King Abdullah II. When we come back, new attacks in Algeria have made many talk about the return of al- Qaeda, but the facts don't quite support the hyperbole. I'll explain.

(COMMERCIAL BREAK)

ZAKARIA: Now for our What in the World segment.

The recent terrorist attack at a natural gas plant in Algeria which, together with the counterstrike by Algiers, left at last 37 foreign hostages and 29 militants dead, has aroused fears that we are watching the resurrection of al-Qaeda, no longer just in Southwest Asia but in many corners of Africa as well.

There's little doubt that the terrorists who seized the plant are brutal, nasty people, but many questions about them remain. Are they really a branch of al-Qaeda? Do they have global jihadist aims? Do they seek to destroy our way of life? It's vitally important that we understand these groups so that our response to them is tailored to the facts.

The Algerian group responsible for the attack, al-Mulathameen Brigade, literally the "the brigade of the masked ones," is led by Moktar Belmoktar, who has been fighting the Algerian government for two decades. He came to prominence in Algeria in the 1990s.

That's when Algeria's Islamic political parties were poised to win parliamentary elections. But in 1992, the Algerian army canceled the elections, banned the Islamic Salvation Front that was poised to win and began a brutal offensive against the radical and violent wings of the Islamist groups that subsequently emerged.

In that war, between 150,000 and 200,000 Algerians died. The most extreme groups that survived continued to battle the Algerian state but they never espoused larger jihadist goals.

In fact, far from being nihilistic, they were careful never to blow up oil pipelines, though there are thousands of miles of exposed pipelines in oil-rich Algeria, because they wanted to replace the government, not destroy the world.

It is these groups that a few years ago morphed into al-Qaeda in the Islamic Maghreb. They have survived not because of any ideological support from the population, some factions have prospered by thoroughly un-Islamic activities like the smuggling drugs and tobacco. (Belmoktar is nicknamed the Marlboro Man for that reason.)

In recent years, it seems they've stumbled upon a far more lucrative business: hostage taking. Belmoktar and other groups like his in Mali and Niger have kidnapped Westerners and extracted princely ransoms in return.

According to the U.S. Treasury, the average ransom for a Western hostage held by AQIIM in 2011 was $5.4 million. This sort of terrorism pays richly in this world, not the next.

Balmoktar leads one of several groups in the region that are loosely affiliated with al-Qaeda. Iyad Ag Ghaly leads another, Ansar Dine, which, last year, seized control of parts of northern Mali and imposed Sharia law.

Ghaly is a larger-than-life figure who has spent long years fighting not for Islam but for the rights of his ethnic group, the Tuaregs. He created Ansar Dine, which means "supporters of religion" when he was passed over for leadership of the main Tuareg rebel movement. Ansar Dine soon became an effective and brutal militia.

What conclusions can we draw from all this? These groups are largely composed of local thugs with long-standing, local grievances that often have very little to do with global Islamic jihad. Terrorism is good business for them.

While their own causes have lost support at home, they have latched on to the al-Qaeda brand in the hope of enhancing their appeal and, perhaps crucially, gaining greater global attention.

Keep in mind Osama bin Laden's words in 2004, "All that we have to do is to send two mujahedin to the furthest point east to raise a piece of cloth on which is written al-Qaeda in order to make the generals race there to cause America to suffer human, economic and political losses." To elevate these thugs and smugglers to grand ideological foes is to play into their own hands.

For more on this, you can read my column in this week's Time Magazine. Up next, my interview with the Prime Minster of Russia Dmitry Medvedev on relations with the U.S., on Syria, on human rights and much more. Don't miss it.

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley in Washington with breaking news from the city of Santa Maria in Brazil, where a nightclub fire has killed at least 245 people. Rafael Romo is live in Atlanta with more. Rafael.

RAFAEL ROMO, CNN CORRESPONDENT: Candy, good morning. The death toll now stands at 245 after a massive fire in the city of Santa Maria in Brazil. It broke out at about 2:00 a.m. this morning. More than 3,000 people were attending an event, a celebration as the end of summer in that part of the world when the fire broke out. It was a very dense fire, thick smoke, and that was the main problem, Candy, that many people died of smoke inhalation. Authorities say that many of those killed also died because people trampled them as many were trying desperately to get out of that place.

As it stands right now, as I said before, 245 people dead. But authorities are only now beginning the investigation. Brazilian Dilma President Rousseff attending a conference in Chile traveled to the area to monitor the response of the federal efforts. Candy, back to you.

CROWLEY: Thanks, Rafael. We will continue to follow this story. But now back to "Fareed Zakaria GPS."

ZAKARIA: I'm Fareed Zakaria coming to you from Davos.

Russia may no longer be the other superpower, but it remains one of the world's most important countries. It has, perhaps, the world's largest nuclear arsenal, massive oil and gas reserves, a U.N. veto, and now a seat at the World Trade Organization. And yet its direction and its interests still seem unclear to many in the West. Is it modernizing? Is it trying to help solve problems like Syria?

In the hope of better understanding the country, I sat down with its prime minister, who struck me as poised and confident, part of a regime that feels it has weathered recent storms from the financial crisis to the Arab spring.

Almost nine months ago, Russia saw one of the most important job swaps I can remember. Russian President Dmitry Medvedev became Russian prime minister, which is what he is now. And Russian Prime Minister Vladimir Putin became Russian president, again.

I last interviewed Mr. Medvedev three and a half years ago before the job swap plan was officially floated. I reminded him of that interview when we met again in Davos this week. (BEGIN VIDEOTAPE)

ZAKARIA: The last time we met, Prime Minister, you were president, and I asked you a question. I said, do you expect that you will serve a second term? You seemed optimistic about the prospect that you would serve a second term, but you didn't. Mr. Putin decided that he was going to run. Why? If you were a successful president, wouldn't it be good to have a second term?

MEDVEDEV (through translator): If you really want to know, let me tell you. We achieved the main goal to ensure continuity. Just like in any political competition, we made sure that the political forces that we represent would stay in power for years to come. And the people supported us.

My current job is very interesting. Being a prime minister is a very demanding job. And as long as I have the strength, I will continue to do this and be of benefit to my country.

Sooner or later, I will have to make other decisions, which I will also make with taking into account the opinions of our people and with my inner feelings, with my wishes. And in that sense, I cannot exclude my long-term political career or anything else. But there is no point in speaking about that right now.

I am often asked, why did you do this? Well, let me ask you a question. What was I supposed to do? Start a race with my close colleague? With my friend? For what reason?

ZAKARIA: So, it was his decision more than yours?

MEDVEDEV (through translator): Can you imagine inside one political party there unraveled such a battle? It's pointless. It would be counterproductive.

ZAKARIA: Let me ask you about Syria.

MEDVEDEV (through translator): Why not.

ZAKARIA: You have said that you, Russia, wants to be neutral in the conflict. You're not supporting the Assad regime, but the reality is that the Russian army has trained the Syrian army. There are long ties there, and you have influence with the Syrian government. Very few countries have it. If you believe -- what I'm trying to understand is that it is not in Russia's interest for this conflict to go on, for it to become one in which more and more militant Islamic forces participate and jihadi groups form. After all, it is directly to your south and could move into Dagestan, Ingushetia, Chechnya. So, why would you not, from a purely Russian national interest point of view, try to get the Assad regime to understand that it must find a compromise and that Assad must step down? MEDVEDEV (through translator): Let us discuss. From the outset, the Russian Federation was not an exclusive ally of Syria or President Assad. We had good relations with his father and him, but he had much closer allies among the European states. We never said that our goal was to preserve the current political regime or making sure that President Assad stays in power. That decision has to be made by the Syrian people. The Syrians are a multi-ethnic and multi-religious people. Thus, we need to have all present at the negotiating table. Sunnis, Shia, Alawites, Jews, Christians. Only this way could you have a genuine national dialogue. If you exclude someone, then the civil war will continue, and the war that is already under way. And in it, in my view, both sides are responsible -- the Syrian authorities and the opposition. Which, by the way, is largely represented by Islamic radicals.

ZAKARIA: But why doesn't Russia try to broker some such agreement? Why don't you take the lead?

MEDVEDEV (through translator): I personally a few times called Assad and said, you need to start reforms. You need to sit down at the negotiating table. I repeat one more time. In my view, unfortunately, the Syrian authorities turned out not to be ready for this.

ZAKARIA: Can Assad survive?

MEDVEDEV (through translator): I think that with every day, with every week, with every month, the chances of him surviving are becoming less and less. But, once again, it should be decided by the Syrian people, not Russia, not the U.S., not any other country. The most important thing right now is to support the process of national reconciliation.

ZAKARIA: But you agree with me, what is happening in Syria, the current situation is bad for Russia, because it is becoming more and more Islamic, it is becoming more jihadi. And you will say -- we are 8,000 miles away in the United States. You will face this in your backyard. So, it is an urgency for you to do something.

MEDVEDEV (through translator): It's hard for me to disagree with you. But I believe the situation is so troublesome for everyone because the representative of radical jihad will not only penetrate into Russia, they travel to Europe, they try to infiltrate the U.S. So, this situation is bad for everyone.

(END VIDEOTAPE)

ZAKARIA: When we come back, the latest Cold War style battle between America and Russia. Why the new ban on Americans adopting Russian babies. I'll ask the prime minister. And a secret conversation he had with President Obama, when we return.

(COMMERCIAL BREAK)

ZAKARIA: The United States and Russia have been making moves that remind one of the Cold War. The current chill arguably started with the death of this man, Sergey Magnitsky. He was working for an American investor, William Browder, in Russia, at one time the largest foreign investor in Russia. To cut a long story short, Magnitsky claimed to have found that certain Russian officials had persecuted Browder, but also defrauded the Russian treasury of $250 million. Magnitsky was persistent and soon found himself in jail, and then died there due to the lack of medical attention.

Browder urged the U.S. Congress to punish those implicated in what he charged was a murder. In early December, Congress passed the Magnitsky Act, which banned certain Russian officials from coming to the U.S. and froze their assets. And Russia responded with a law effectively banning Americans from adopting Russian children. It is now drafting a list of American officials it wants to ban from Russian territory.

I brought all this up with Russia's prime minister, Dmitry Medvedev.

(BEGIN VIDEOTAPE)

ZAKARIA: So let's talk about corruption. When we look from the outside, what we see is a situation which seems still out of control. We hear about the case of Sergey Magnitsky. How should we think about this?

MEDVEDEV (through translator): I'll tell you. I'm sincerely sorry for Sergey Magnitsky, as I would be so for any person who passed away behind bars. And Russian law enforcement needs to investigate fully what happens in that prison where he died and who is to be held responsible.

Speaking of the activities of the late Mr. Magnitsky, my assessment is quite different. It is not impossible that they came across corruption, because corruption is abundant. But he was never a corruption fighter.

ZAKARIA: The United States Congress has passed trade legislation with Russia, which ties trade with Russia to certain issues of corruption, to, you know, individuals who are deemed to have been part of a system of corruption in Russia. You have criticized that legislation, and you have said that Russia will respond symmetrically and asymmetrically. I want to ask, are there any further Russian retaliatory moves that we should anticipate?

MEDVEDEV (through translator): Regarding the Congress and its actions, well, I think it's bad when a foreign parliament passes a decision regarding another state. It is even worse when a foreign parliament -- and I'm referring to the U.S. Congress in particular -- declares a number of persons criminals.

You need to feel the difference. There is a fine line. Every country has the right to refuse any citizen of any other country a visa to enter its territory. That is the normal practice. That is in line with international conventions, and you don't even have to give reasons. But when that is made publicly, deliberately, when Congress says we're going to compile a list of names of specific persons that committed an offense, how would you call that? I would call that an extrajudicial act, because you find them guilty without court and trial.

So, this situation, our Russian parliament had to respond, and I'm not ready. I'm not ready to talk now as to what's symmetric or asymmetric, because that's emotional. But in any case, we can always find somebody who the Russian parliaments would declare as violators, perpetrators of human rights or other legislation. They found such people and they passed a vote.

ZAKARIA: But there will be retaliation under international law in the way it is allowed?

MEDVEDEV (through translator): Well, I believe the whole situation is bad, and it won't improve Russian-U.S. relations. It's not going to be beneficial for the global world order. I've always had my legal feeling about that. I do not think that in the 21st century, any state, even such powerful and democratically developed as the U.S., has the right to have such decisions towards the citizens of other countries. No one has canceled the sovereignty of states.

ZAKARIA: One of the acts taken by the Russian Duma was to ban the adoption of Russian orphans by Americans. I'm puzzled by this, because I see it as a retaliation against the passage of the Magnitsky Act. But the people who are being punished are Russian orphans. These are often handicapped children, or certainly in some way regarded as undesirable, who are being given a new life, a hope and a stable family in the United States. Why punish the Russian orphan?

MEDVEDEV (through translator): Neither legally nor practically, it is not linked with the Magnitsky case, the so-called Dima Yakovlev Law. It's a law which expresses the concerns of the Russian Parliament and the Russian State Duma and the Council of the Federation of the destiny of our children, because no matter what anyone says, this is the direct responsibility of a state to ensure that children who do not have parents have the necessary care, including health care. This is a part of a moral culture. We should take all the necessary decisions so that there would be no orphans in Russia itself.

The U.S. does not have such a problem. Many European countries do not have this problem. We have a good society already, and we have people who are well off enough that are able to give food and shelter to our children. This is the reason behind the decisions we have made.

ZAKARIA: But you could -- you could encourage Russians to adopt orphans and handicapped orphans. You could provide them with incentives. Why ban foreigners from doing it? Because if the culture in Russia does not change -- and cultures don't change in two or three years -- you will have a generation of orphans who have been punished for no fault of their own. MEDVEDEV (through translator): Well, there is another side to this issue, which is rather complex, and I would not like to speculate on this matter. But, still, I have to mention it. Unfortunately, the information which we believe about the fate of Russian children adopted in the United States does not make anyone happy.

ZAKARIA: Meaning what? Explain what that means.

MEDVEDEV (through translator): I will explain. A large number of American families who adopted Russian children really provide the correct care, upbringing and education. And in that case, they get high marks. This is the highly moral attitude. But, unfortunately, in our country, we know a lot of cases when children adopted by American parents died or were tortured or lost their health in the U.S., and even one such case would be enough to suggest the draft of a law for consideration.

ZAKARIA: Are you -- documented cases that you have about this?

MEDVEDEV (through translator): Of course. These cases, all the cases, maybe they don't reach you. All these cases have been described on the Russian TV multiple times and the Internet even.

ZAKARIA: Let me ask you a final question, Mr. Prime Minister. When you were part of one of the world's most overheard private conversations between you and President Barack Obama, and President Obama said famously, "in my second term, I will have more flexibility."

(BEGIN VIDEO CLIP)

OBAMA: After my election, I have more flexibility.

(END VIDEO CLIP)

ZAKARIA: And you said, thank you, I will convey that to Mr. Putin. What was he talking about? What kind of flexibility?

(LAUGHTER)

MEDVEDEV (through translator): Well, I think this question is better asked not to me but to my colleague, Barack Obama.

But if we are serious, I think everything is quite simple. It's not for me to explain to you the intricacies of American politics. But it is absolutely obvious that the Constitution stipulates that the second term of the American president is his last term. In that sense, any U.S. president during his second term can take a stronger position and act in a more decisive manner, and that is exactly what Barack meant.

But if we talk about the subject itself, it is extremely difficult, and so far we don't see any flexibility. There are no easy solutions in terms of anti-missile defense. There is no flexibility. We have not changed our previous positions. The U.S. has one opinion, and the Russian Federation, unfortunately, has a different opinion. These positions are not getting any closer.

ZAKARIA: Welcome back to Davos, Switzerland. Tuesday marked an anniversary on this continent. It was the 50th anniversary of the Elysee Treaty. And my question of the week is, what was the Elysee Treaty? A, a treaty establishing the president as head of state in France. B, a treaty of peace and friendship between France and Germany. C, a treaty creating the European steel and coal community. Or D, a treaty bringing France into NATO. Stay tuned. We'll tell you the correct answer. Go to CNN.com/fareed for more of the GPS challenge, also follow us on Twitter and Facebook. Remember, if you miss a show, go to itunes.com/fareed. You can find audio and video versions.

This week's book of the week is "The Idea Factory: Bell Labs and the Great Age of American Innovation." It tells an amazing story of an American institution that probably spurred more innovation than any other. Bell Labs at its height employed 15,000 people, 1,200 of whom were Ph.D.s, 13 of whom won Nobel Prizes. It's a story of American innovation from the most unlikely source.

And now, for the last look. It's been frigid in Davos this week, and those snow-capped mountains make you want to curl up by the fireplace with a good book. Almost 1,000 miles away, Greece is enjoying slightly warmer temperatures, but take a look at these pictures. I reckon you can barely see Acropolis from the Agora (ph). This smog is said to be not from cars or coal plants, but from the smoke from wood stoves and fireplaces, and it's not because the Greeks are curling up with a good book. It seems that there has been a massive switch off heating oil as many can no longer afford it to heat their homes. Bloomberg says heating oil prices have risen here 50 percent from 2011 to 2012, mainly due to the heavy taxes levied on. So the Greeks are turning to burning everything from furniture to chopped down trees, some illegally cut from protected forests.

According to the EPA, a fireplace emits more than 2,000 times the amount of fine particles that an oil furnace does. Surely, the environmental and health care costs from toxic clouds of smoke exceed the benefits of collecting high heating oil taxes, especially if the citizens are no longer buying it.

So what is plan B for Greece?

The correct answer to our GPS challenge question was B. The Elysee Treaty was a cooperation treaty signed on January 22nd, 1963, by French President Charles de Gaulle and West German Chancellor Conrad Adenauer. It ushered in a new era of peace between these two neighbors who had started three wars between each other in the previous 75 years. For all their problems, France and Germany have come a long way.

Thanks to all of you for being part of my program this week. I'll see you next week. Stay tuned for RELIABLE SOURCES.